About this Book

Spooked is in no way intended to be a history of business intelligence, nor is it a how-to guide of any sort. Instead it offers a slice of lifethrough narrative accounts of todays corporate spiesof one of America's fastest growing industries. The stories, though unbelievable, are all very real. The book centers on the first case ever brought to trial under the Economic Espionage Act of 1996, involving glue and label makers Avery Dennison, headquartered in Calif., and Four Pillars Enterprises of Taiwan. This spy saga began with an Avery scientist who was caught viewing a restricted document and progressed to a joint Avery Dennison-FBI joint sting operation. This escalated into a flurry of espionage charges and counter-charges, with allegations of perjury and prevarication, entrapment, evidence - and jury-tampering, kidnapping, and misuse of the federal penal code thrown in for good measure. It is a case that raises the disturbing question: Could a powerful American company misuse federal law to decapitate a foreign rival as a part of its global business strategy?

And the Avery Dennison incident is not the result of an isolated episode. Youll read about PictureTel spook Karim Fadel, who uses his tricks to soak up some of his competitors' most precious secrets. Former CIA official Jan Herring tells the history of information collection at Motorola. Hacker Marc Maiffret explains how he was once paid $1,000 to steal U.S. military software by a Kashmiri terrorist linked with Bin laden. Liz Lightfoot shows the kind of data she can dig up with just a phone, a computer and a modem.

A couple of months into researching this book, I called Marc to run a potential source by him, a corporate spy type who had cold-called me at Forbes magazine with a tale of intrigue. But something didn't feel right. I just couldn't put my finger on it.

"He claims he's former CIA," I said.

Marc roared when he heard the name. "Slick, he's CIA, all right. He worked in the cafeteria. Seriously. A lot of these clowns? They say they work for a three-lettered agency like CIA, FBI or NSA? Well, theres no easy way to tell, since no agency will ever tell you if some guy ever worked for them."

"The cafeteria," I repeated.

"Aren't you glad I'm working with you?"

Sure. Without Marc Barry there would be no Spooked.

Prologue
Spy Trap

Pin Yen (P.Y.) Yang, a 72-year-old Taiwanese businessman and founder of Four Pillars Enterprises, leafed through papers marked "confidential" and "Property of Avery Dennison" and pried out the staples. It was a hot, suffocating day in early September, 1997, and Yang, his daughter Sally (a researcher at Four Pillars) and Avery Dennison scientist Ten Hong (Victor) Lee were in the Westlake Holiday Inn in Cleveland, Ohio. There they sipped Dr. Pepper and munched on blueberry bagels (for Yang an exotic food), discussed obstacles in producing pressure-sensitive adhesives, peppering their four-hour conversation with words like "tackifier", "viscosity", and "high-speed release"and engaged in what the government would later call economic espionage.

Each time Yang came across the confidential warnings stamped on a patent application for a new Avery technologyan environmentally-friendly adhesives process that was also cost-efficientand on a secret plan outlining expansion into Asia, he folded over the pages, made a crease, then slit it with a pocket knife. Yang was particularly disturbed by the patent application, which covered the rights to an all-purpose, or universal, "acrylic emulsion adhesive." It looked similar to a technology his company had developed. Yang had been involved in some contentious battles over patents in the past and he figured this might presage the latest chapter. Since no stapler was handy, after each cut Yang scotch-taped the pages back together like a hinge. Indicating the more than dozen damning paper scraps, he addressed Lee, his "consultant": "You have to throw that trash out at your home," Yang told him in Taiwanese. "Take that back to your house." The last thing he needed was to be detained ! by U.S. Customs with pages stamped CONFIDENTIAL and Property of Avery Dennison. That could mean big trouble.

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